Return on investment (ROI) states the gain or loss on an investment as a percentage of the amount put in — net gain ÷ amount invested × 100, on Money Snap’s description. MoneySense defines a return as the gain or loss made from an investment: income earned from it, such as dividends or a bond’s coupon, or the capital gain or loss on its price; the net return is the amount earned less any losses and fees. ROI covers the whole holding period: in MoneySense’s example, SGD 100 earning 4% returns compounded every year grows to SGD 116.99 after 4 years, an ROI of 16.99% on Money Snap’s arithmetic.
Singapore · ROI after 4 years on MoneySense’s SGD 100 investment earning 4% returns compounded every year — Money Snap’s arithmetic on MoneySense’s figures
16.99%
InvestedSGD 100
Year 4SGD 116.99
Return a year4%
Rule of 7218 yrs
Unit trust TER1.0–2.5%usually, of the fund’s NAV (MoneySense)
CPF OA rate2.5%a year, 1 Oct – 31 Dec 2026; its legislated minimum (CPF Board)
CPFIS-OA > 2.5% p.a.71%of investors (491,000) made cumulative total profits above 2.5% p.a., 2016–2024 (CPF Board)
CPFIS wrap fee cap0.4% a yearof fund portfolio value; a CPF Board fee example
Savings Bond, 10 years2.4% a yeareffective; MAS illustration, July 2015 application
One-tier dividendsnot taxablegenerally, for individuals; co-operatives excepted (IRAS)
On this pageIncome, gain, net returnWorked exampleWhat it means for youMisconceptionsRelated termsSources
Key takeaways
- MoneySense defines a return as the gain or loss made from an investment. It can be investment income — income earned from the investment, such as dividends from shares or unit trusts, or the coupon received from a bond — or a capital gain or loss, the amount made or lost when the asset is sold. ROI expresses the net gain as a percentage of the amount invested; that formula is Money Snap’s description, as the MoneySense, MAS and CPF Board pages used here define a return and its parts but do not set out an ROI formula.
- MoneySense defines net returns as the amount earned from a product less any losses and fees: transaction costs such as sales charges, brokerage charges and manager fees reduce the return. Unit trust fees are usually payable regardless of how well or poorly the fund performs, so a fund grows in value only when its returns exceed the fees and charges incurred; its Total Expense Ratio (TER), made up of the fees charged to the fund, is usually between 1.0% and 2.5% of the fund’s NAV. For ETFs, MoneySense adds that bid-ask spreads, brokerage commissions and withholding taxes also affect net return.
- ROI on its own does not show how long the money was invested. In MoneySense’s compounding example, SGD 100 earning 4% returns compounded every year grows to SGD 104 after year 1 and SGD 116.99 after year 4, so a 4% yearly return compounds to a 16.99% ROI over 4 years on Money Snap’s arithmetic; by the Rule of 72 that MoneySense describes (72 ÷ the rate), money at 4% takes about 18 years to double. MAS’s Savings Bond illustration states returns per year: 0.9% over the first year, about 1.2% a year on average over 2 years and an effective 2.4% a year over 10 years.
- MoneySense states that, generally, the higher the potential returns, the greater the risk, and defines risk as the likelihood that the return from an investment may be less than expected. It notes that investing generally helps generate better returns than saving in a bank, but that all investments come with risks and some or even all of the money invested can be lost. MoneySense adds that high inflation, as measured by the Consumer Price Index, erodes the purchasing power of returns and so affects the real value of investments; and for a Singapore investor in a USD-denominated ETF tracking US equities, the movement of the USD against the SGD is a second source of return or loss besides the performance of US equities.
- CPF Board states that CPF savings invested under the CPF Investment Scheme (CPFIS) no longer earn CPF interest and are instead subject to market performance, and lists opportunity cost — the interest earned in the CPF accounts and the fees and charges of the product — among the factors it sets out before investing. For 1 Oct – 31 Dec 2026, the Ordinary Account earns 2.5% a year, its legislated minimum, and Special, MediSave and Retirement Account savings earn 4%, a floor the Government has extended to 31 Dec 2027. Members below 55 earn an extra 1% on the first SGD 60,000 of combined balances (capped at SGD 20,000 for the OA); members aged 55 and above earn an extra 2% on the first SGD 30,000 (capped at SGD 20,000 for the OA) and an extra 1% on the next SGD 30,000 — up to 5% and 6% a year respectively with the floor in place. CPF Board reports that, based on cumulative performance between 2016 and 2024, 71% of CPFIS-OA investors (491,000) made cumulative total profits above 2.5% p.a.
Definition
What is return on investment?
MoneySense defines a return as the gain or loss made from an investment, and names its parts.
Investment incomeincomeIncome earned from the investment, such as dividends from shares or unit trusts, or the coupon received from a bond.
Capital gain or losson saleThe amount made or lost when the asset is sold: the price gain or loss on the product.
Net returnafter feesThe amount earned less any losses and fees. Sales charges, brokerage charges and manager fees reduce it.
ROI puts the net result on one scale: net gain ÷ amount invested × 100, so a negative figure means money was lost. That formula is Money Snap’s description; the MoneySense, MAS and CPF Board pages used here define a return and its parts but do not set out an ROI formula.
Worked example
ROI on an example SGD 10,000 investment
Money Snap’s illustration, with invented figures: SGD 10,000 invested, SGD 600 of dividends received while it was held, sold for SGD 11,000, and SGD 200 of fees and charges along the way. Each line uses MoneySense’s terms; the ROI is the net gain divided by the SGD 10,000 invested.
| Illustration | MoneySense term | Amount | Of SGD 10,000 |
|---|---|---|---|
| Dividends received while held | Investment income | SGD 600 | 6% |
| Sold for SGD 11,000, bought for SGD 10,000 | Capital gain | SGD 1,000 | 10% |
| Gain before fees | Return, before fees | SGD 1,600 | 16% |
| Sales charge, brokerage and manager fees | Transaction costs | −SGD 200 | −2% |
| Net gain | Net return | SGD 1,400 | 14% ROI |
The same 14% ROI as a yearly rate
Held 1 year14.00%
Held 3 years4.46%
Held 5 years2.66%
Held 10 years1.32%
Money Snap’s arithmetic: (1 + 0.14) raised to the power (1 ÷ years held), minus 1 — the steady yearly return that compounds to the same 14% over the period (an annualised return). Dividing 14% by 5 years instead gives 2.8% a year, a simple average that leaves out compounding.
What it means for you
Where return on investment shows up
Shares, funds and ETFsROI calculator
Dividends from shares or unit trusts are investment income, and the price difference when the asset is sold is the capital gain or loss (MoneySense). For unit trusts, MoneySense notes that fees are usually payable however the fund performs and, even when its value has been fairly stable, reduce the value of the investment over time; the TER is usually between 1.0% and 2.5% of the fund’s NAV, to be disclosed in its factsheet. For an ETF, MoneySense adds that bid-ask spreads, brokerage commissions and withholding taxes also affect net return, and that for a Singapore investor a USD-denominated ETF tracking US equities has the USD’s movement against the SGD as a second source of return or loss.Bonds and Savings BondsSavings Bond rates
MoneySense states that a bond’s return depends on the coupons received over its life and on any capital gain or loss if its price becomes higher or lower than the price paid, and that a bond fund’s total returns include income and capital gains or losses over time. MAS says a Savings Bond held for the full 10 years returns the average 10-year SGS yield of the month before the investment, while redeeming early gives a lower return, with pro-rated (accrued) interest. In MAS’s illustration (SGD 1,000 applied for in July 2015, figures for illustration only), the bond pays SGD 9 in year 1, a 0.9% return; SGD 15 in year 2, about 1.2% a year on average over 2 years; and SGD 33 in year 10, an effective 2.4% a year over 10 years — the average 10-year SGS yield in June 2015.Investing CPF savingsCPF interest rates
Invested CPF savings stop earning CPF interest — 2.5% a year on the Ordinary Account and 4% on the Special Account (members below 55) for 1 Oct – 31 Dec 2026 — and their return depends on market performance (CPF Board). CPF Board gives examples of CPFIS fees: a wrap fee capped at 0.4% a year of the fund portfolio value, Total Expense Ratio caps of 0.35% to 1.75% a year across fund risk categories, and an estimated broker’s commission of 0.25% to 0.28% of the trade amount for exchange-traded products, with a minimum charge of SGD 25 per transaction. On 12 February 2026 it announced a voluntary new scheme of simplified, low-cost, diversified life-cycle products from commercial product providers, with all-in fees capped; selected providers are expected to be announced in the first half of 2027 and the scheme to launch in the first half of 2028.Tax on returnsIncome tax calculator
For individuals, IRAS states that, generally, dividends paid by a Singapore resident company under the one-tier corporate tax system are not taxable, except dividends from co-operatives, and lists interest on deposits with approved banks and licensed finance companies in Singapore as not taxable. Gains from the sale of property, shares and financial instruments in Singapore are generally not taxable, but gains from “trading in properties” may be taxable. MAS lists Savings Bonds as exempt from tax.InflationInflation calculator
MAS defines inflation as a general increase in the overall price level of goods and services across the economy, and MoneySense notes that high inflation, as measured by the CPI, erodes the purchasing power of returns and so affects the real value of investments. In Money Snap’s illustration, a 4% return in a year when prices rise 2% is about 1.96% in real terms (1.04 ÷ 1.02 − 1).Common misconceptions
Five things people get wrong
ROI is a yearly rate.
ROI covers the whole period the money is invested. In MoneySense’s example, SGD 100 earning 4% returns compounded every year grows to SGD 116.99 after 4 years: 4% a year, but an ROI of 16.99% over the 4 years on Money Snap’s arithmetic.
A bond’s return is just its coupon.
MoneySense states that a bond’s return depends on the coupons received over its life and on any capital gain or loss if its price becomes higher or lower than the price paid. For a Savings Bond, MAS says redeeming early gives a lower return than holding it for the full 10 years.
Fund fees only matter when the fund falls.
MoneySense states that unit trust fees are usually payable regardless of how well or poorly the fund performs, so the fund grows in value only when its returns exceed the fees and charges; even when its value has been fairly stable, the fees reduce the value of the investment over time.
A higher potential return carries no extra risk.
MoneySense states that, generally, the higher the potential returns, the greater the risk. It defines risk as the likelihood that the return may be less than expected, and notes that some or even all of the money invested can be lost.
Dividends and gains on shares are taxed as income in Singapore.
For individuals, IRAS states that, generally, dividends paid by a Singapore resident company under the one-tier corporate tax system are not taxable (dividends from co-operatives are the exception), and that gains from the sale of property, shares and financial instruments in Singapore are generally not taxable; gains from “trading in properties” may be taxable.
Sources and reviewChecked against MoneySense, MAS, CPF Board and IRAS pages on 2026-10-04
- MoneySense — What is investing? — return, investment income, capital gain or loss, net returns and risk
- MoneySense — Managing investment risk — potential returns and risk
- MoneySense — Understanding bonds — a bond’s return and a bond fund’s total returns
- MoneySense — Unit trusts: guide to pricing and fees — fees against returns and the usual TER range
- MoneySense — Understanding unit trusts — fees reducing value over time
- MoneySense — How do I choose between ETFs that track the same index? — other ETF costs and currency as a source of return
- MoneySense — Effects of compounding interest — the SGD 100 example and the Rule of 72
- MoneySense — What you need to know to take care of your investment portfolio — inflation and the real value of investments
- MAS — What is Inflation? (Economics Edu) — the definition of inflation
- MAS — Investing in Savings Bonds — the July 2015 illustration, holding for 10 years, early redemption and tax
- CPF Board — Investing your CPF savings — opportunity cost
- CPF Board — Should you invest your CPF savings with CPFIS? Three questions to ask first — invested savings and CPF interest
- CPF Board — CPF Investment Scheme: what you need to know about CPFIS — examples of CPFIS fees
- CPF Board — Earning attractive interest — rates for 1 Oct – 31 Dec 2026 and the OA’s legislated minimum
- CPF Board — 4% floor extended to 31 December 2027 (22 Sep 2026) — the floor and extra interest
- CPF Board — CPFB to introduce new investment scheme in 2028 (12 Feb 2026) — the new scheme, its fees and timing
- CPF Board — Annexes to the 12 Feb 2026 release (Annex C) — CPFIS-OA performance, 2016 to 2024
- IRAS — Dividends — one-tier dividends
- IRAS — Interest — interest on deposits
- IRAS — Gains from sale of property, shares and financial instruments — gains and “trading in properties”
Official MoneySense, MAS, CPF Board and IRAS material, for general information only; the ROI formula, the worked example and the yearly equivalents are Money Snap’s arithmetic. Not financial advice.
This page is provided for educational and informational purposes only. It does not constitute financial advice. All figures and worked examples are estimates for illustrative purposes, are subject to change, and do not reflect any individual’s circumstances. Always refer to MoneySense, MAS, the CPF Board and IRAS and seek independent professional advice before making any financial decisions.